Global Grain Stocks Tighten as US Corn Exceeds Expectations

A global grain rally is underway due to concerns about the world's supply of corn and wheat. Despite the United States producing its second-largest corn crop in history, the country's farmers are not meeting demand. In fact, according to the U.S. Department of Agriculture (USDA), global corn consumption will exceed production by 30 million metric tonnes in 2026/27.

This deficit is the largest in over three decades and has already led to a significant increase in prices. Chicago corn, for example, saw a record rally of 16% in August when prices tend to be under seasonal pressure. Other grain futures, such as wheat and soybeans, have also seen price increases.

The issue is not just limited to the United States. Major exporting nations are expected to see a decline in combined corn and wheat output, even as U.S. farmers continue to harvest their crops. This will result in the largest drop in exports by volume since 1993/94 and the steepest percentage decrease since 2012/13.

The availability of wheat for export is also a concern, with the USDA expressing worries about Russia and Ukraine's combined stocks reaching a record high in 33 years. The ongoing conflict between these two major suppliers has contributed to this issue.